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France, Australia sign subs agreement

AAP logoAAP 19/12/2016 Max Blenkin, Defence Correspondent

Australia and France have formally signed an agreement to build 12 advanced submarines.

Prime Minister Malcolm Turnbull said the agreement, signed with visiting French Defence Minister Jean-Yves Le Drian in Adelaide on Tuesday, underpins the largest capital project in Australia's history.

"Security is uncertain around the world and that is why we are re-equipping our navy and our defence forces right across the three services and the cyber sphere, ensuring we have the capabilities to keep Australians safe in times that are more challenging than we have known for many years," he said.

Signing the agreement was a critical step in a project that would create 2800 jobs at the cutting edge of technology.

"Our future, our assurance, our security as a first world, high-wage ... economy depends upon the technology, the innovation, the skills that come from investment such as this," Mr Turnbull said.

Through the $50 billion project, French shipbuilder DCNS will design the new submarines and they will be built in Adelaide.

Mr Le Drian said DCNS, which is part government-owned, was not a business like any other as it constructed submarines that ensured France's sovereignty.

"This business that ensures France's sovereignty would tomorrow become the partner for Australia's sovereignty," he said.

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